2019 (6) TMI 533 - AT - Income Tax

Rectification of mistake u/s 254 - Non exclusion of CFC Grant from the total income - mistake apparent from record - HELD THAT - We find that the Tribunal inadvertently failed to adjudicate ground 20 taken by the assessee challenging order of Ld.CIT(A) in confirming non exclusion of CFC grant from total income. We further note that non adjudication of specific ground taken by the assessee in its memorandum of appeal constitutes a mistake apparent from record which can be rectified u/s 254(2) of the Act. Hence we recall our order passed for AY 2002-03 2018 (10) TMI 1288 - ITAT MUMBAI for the limited purpose of adjudication of ground 20. The other part of the order would stand as it is.

Summary

Issues:
Rectification of order passed by Tribunal regarding non-exclusion of CFC grant from total income for AY 2002-03.

Analysis:
The assessee filed a miscellaneous application seeking rectification of the Tribunal's order dated 17-10-2018 for AY 2002-03, specifically related to ground No. 20 concerning the non-exclusion of CFC grant from total income. The application highlighted that the Tribunal failed to decide this ground, which was crucial for the assessee. The assessee argued that the issue was in their favor based on a previous decision for AY 2001-02. The Tribunal acknowledged the oversight and agreed that the non-adjudication of the specific ground constituted a mistake apparent from the record under section 254(2) of the Income Tax Act, 1961.

The Ld.AR for the assessee contended during the hearing that the Tribunal's order contained an apparent mistake as ground 20 concerning the non-exclusion of CFC grant from total income was not addressed. The Ld.DR representing the department agreed that the order needed rectification under section 254(2) of the Act due to the absence of findings on ground 20. After hearing both parties and reviewing the application and the previous order, the Tribunal recognized the error in not adjudicating ground 20 challenging the non-exclusion of CFC grant from total income. Consequently, the Tribunal decided to recall its previous order dated 17-10-2018 for AY 2002-03 solely for the purpose of addressing ground 20, while the rest of the order remained unchanged.

As a result, the Tribunal allowed the assessee's miscellaneous application, directing the registry to schedule a hearing on 02-07-2019 specifically to address ground No. 20 without issuing any further notice to the parties. The decision to rectify the order was made to ensure the proper adjudication of the crucial issue raised by the assessee regarding the exclusion of the CFC grant from the total income for the relevant assessment year.